Bitcoin Vocabulary – Words that will help you understand bitcoin

Bitcoin Vocabulary

Below are a list of words that are often used in reference to bitcoin. Understanding these words will greatly increase your capacity to understand anything else you read or hear about bitcoin.

Address — A public key to your bitcoin wallet that you give people to send bitcoin to your bitcoin wallet.

Block — The public record of bitcoin transactions. Every ten minutes or so a new block is created, which is then added as the last block on the blockchain.

Blockchain — The public chain of all blocks of bitcoin transactions in history.

Bitcoin — 1. A payment system built by someone(s) using the name Satoshi Nakamoto in 2009. 2. The currency used on the bitcoin payment system. 3. The basic unit of value on the bitcoin payment system. One bitcoin is equal to 100,000,000 Satoshis, currently the smallest unit spoken of on the bitcoin payment system. See more…

BTC — Common abbreviation for bitcoin, like USD for US Dollar or AUD for Australian dollar.

Confirmation — Agreement by the bitcoin network that a transaction has taken place. Each time a transcation is included in a new block, it is considered to have 1 more confirmation. By convention, most people wait for six confirmations before considering a payment complete.

Double-spend — A double spend would occur if someone were to successfully send the same bitcoins to two different people at the same time. The public blockchain, which requires miners to confirm transactions, prevents this from occurring on the bitcoin network.

Mining — The process of solving mathematical calculations to make the bitcoin network more secure. Miners are rewarded with bitcoins for helping keep the network secure. See more…

P2P — A system whereby a network of peers provides the infrastructure rather than one central point. One familiar application is file sharing. A P2P network is what allows bitcoin to function without a bank or other trusted third party processor.

Private key — The secret key behind a bitcoin address that allows a user to spend bitcoins from that address. This is stored on the hard drive of whoever controls the bitcoin address in question. It is not stored anywhere centrally, so must be backed up in order to be a safe store of bitcoins.

Satoshi Nakamoto — The pseudonym of the creator(s) of bitcoin. No one knows who the creator was. Evidence points to him being a native English speaker.

Satoshi — The smallest unit of value currently spoken of on the bitcoin network. Equal to 0.00000001 bitcoins.

Wallet — Similar to a physical wallet, a bitcoin wallet is where one stores their bitcoins. Technically, this is simply the file that contains the private keys that allow bitcoins to be spent.

I hope that helps! Please comment below if you have any questions or would like to add words to our bitcoin glossary.